“No one wants to be a beggar for life” – “Poverty, Inc.”

The way we, that is, the developed world, are doing international development is broken. One comment in the movie from an economist in Africa tells the story: emergency relief is the standard model used for decades to end poverty and suffering.

That isn’t working.

As another speaker says:

“No one wants to be a beggar for life”

I read two reviews of the movie, one from a center-left perspective and one from a center-right perspective. Both praise the movie and share in the criticism of big aid.

The documentary won several awards at a libertarian film festival and then won best documentary at a progressive film festival. Imagine that!

Guess which of the following two columnists made this comment?

It’s almost like anybody with a populist outlook and, you know, a brain between their ears and a heart between their shoulders, has got to look at our current system of international development and aid and say there’s something deeply wrong.

The issues are pretty much the same as I’ve discussed for a long time on this blog.

According to the documentary, the aid community has evolved into a Big Industry, with Big NGOs getting subsidies from Big Governments, and then buying subsidized food from Big Food and dumping stuff on local economies.

All those players do quite well. The recipients? The actual impact on them isn’t part of the discussion.

Aid has morphed into crony capitalism.

Also, NGOs gather donated stuff like clothes, used underwear, or shoes and then dump all that stuff on a local economy which destroys the local businesses.

The producer of the movie said:

And so one of the negative things about foreign aid and the model I think that resonates with people from all political spectrum (sic) is that our so-called attempts to help are actually excluding people and keeping them poor.

Hmm. Excluding the people who are hurting and in need. Then keeping them that way.

Merely pumping more money into development won’t end poverty. Why?

The producer explains:

Because poor people are not poor primarily because they lack stuff. Poor people are poor primarily because they lack the institutions of justice that enable them to create wealth and prosperity for their own families and their own communities.

Lack of institutions of justice would include:

Unclear property rights – If you don’t have clear, defensible title to property, there is no incentive to invest in it. Someone with more power than you can take your land away. A poor widow has no chance to keep her land and produce enough food to stay alive if some politically connected neighbor feels like he (usually) wants her land and just flat out steals it.

No just legal system – A study in India says it can easily take 20 years to get a hearing in court, which means justice is unavailable to those without serious political power.

Bureaucracy – In India it will take 300 days to get a business registered so you can open your doors. That is, unless you have serious political pull. The person who actually hired local attorneys to walk through the process and count the days was told by a local politician he could get it done in 30 days if desired. With an appropriate expression of appreciation, I’m sure.

I’m sure you agree those broken systems are just wrong, no matter where you land on the continuum of political or economic views.

A Haitian solar power company is doing well until US NGOs raise money to give away solar panels after the 2010 earthquake. “It’s hard to compete with free,” says Alex Georges, co-founder of Enersa, the solar power firm. “When you have companies sending thousands of solar panels to Haiti, how are you going to sell?”

I’m sure that so-called help destroyed that specific business. The ‘aid’ likely destroyed the entire solar industry in Haiti.

And more:

No less an authority than Bill Clinton apologized for the US policy of selling subsidized rice to Haiti, which had the unintended effect of hurting local farmers. “It was a mistake,” Clinton says. Second-hand clothing shipped to Kenya, the film tells us, all but destroys the local clothing industry; you might want to think before depositing your old T-shirts in clothing bins, which can be the first stop on a long journey to overseas markets.

Want to destroy the textile industry in an entire country? Ship in tons and tons of free clothes. After the clothes you sent wear out, there won’t be any manufacturers or retailers left in operation to provide new clothes.

Mr. Gunther points out there are signs of progress. Check out his article for names of several charities that are not hurting people while trying to help them.

Mr. Gunther wishes the documentary focused more on the new charities that have a clue.

I understand his point. Before those charities gain lots of traction, a huge portion of the donor public and most government officials need to have a change in perspective so they understand how much harm they are doing. That is the goal of the movie.

Oh, Mr. Bowyer made the comment I quoted early in this post about anyone with either a functioning brain between ears or beating heart between shoulders can see a problem here.

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2 Responses to “No one wants to be a beggar for life” – “Poverty, Inc.”

Excellent article, the vast majority of international aid is really more destructive than constructive and it is not that people’s intentions are not in the right place, but rather an almost complete ignorance of the outcomes of the policies they implemented and yet an arrogance on thinking that they know more than the people that they are helping on how to help them. Couple that with the greedy/corrupt governments that tend to be a significant factor in most areas of the world where poverty exists and you get a very difficult problem to solve.